The Wetlands Reserve Program (WRP) is a national program authorized by the 1990 Farm Bill (more formally known as the Food, Agriculture, Conservation and Trade Act of 1990). WRP is a voluntary opportunity offering landowners a chance to receive payments for restoring and protecting wetlands on their property through the establishment of permanent, or (possibly) thirty-year, conservation easements. This Woodland Owner Note has been revised to help North Carolina landowners understand the provisions of the 1995 Wetlands Reserve Program.

About the WRP…

At the time of colonization, North Carolina is estimated to have had approximately eleven million acres of wetlands, predominantly in the coastal plain. More than half of those wetlands have since been modified, especially by drainage associated historically with farm and forest management, and more recently with development and road construction. Such modifications have caused North Carolina to figure prominently among states with significant wetland "losses", particularly in recent decades.

When Edward Madigan, then Secretary of the U. S. Department of Agriculture, announced on February 6, 1992 that the first Wetlands Reserve Program would be piloted in eight states (California, Iowa, Louisiana, Minnesota, Mississippi, Missouri, New York and North Carolina), he said that Wetlands are critical for the protection and enhancement of habitat for migratory birds and other wildlife, improving the hydrology of our nation's water supplies, and storing flood waters. It is more important now than ever that our wetlands be preserved for future generations.

The emphasis of the WRP is on the restoration of the functions and values of wetlands. Those functions and values include habitat for migratory birds and other wildlife, including threatened and endangered species; the protection and improvement of water quality; the attenuation of water flows due to flooding; the recharge of ground water; the protection and enhancement of open space and aesthetic quality; the protection of flora and fauna contributing to the nation's natural heritage; and the contribution to educational and scientific scholarship. More than 50 percent of the 800 species of migratory birds depend on wetland habitats, and more than one-third of the federally listed endangered and threatened species depend on wetlands.

The objectives of the WRP include:

  1. restoring hydrology and vegetation on wetland areas that have been used in the past for cropping and forage production;
  2. protecting the functions and values of wetlands;
  3. helping to achieve the national goal of no net loss of wetlands; and
  4. retaining restored wetlands in private ownership by reserving to the landowners the title, the right to quiet enjoyment, control of access, the right to undeveloped recreational uses, and limited rights to subsurface resources.

Through this program, USDA plans to restore and protect up to one million acres of wetlands nationally under permanent or thirty-year conservation easements. Approximately 50,000 acres were enrolled in the nine pilot states (Wisconsin was later included) during the first year of the program. An additional 75,000 acres across twenty states were enrolled in the second sign-up in 1994. For 1995, 150,000 acres are authorized nationally for participation. In North Carolina, nearly 10,000 acres have already qualified for enrollment in the first two sign-up periods.

To accomplish the objectives of the Wetlands Reserve Program, the USDA Natural Resources Conservation Service (NRCS), which now administers the WRP, is authorized to issue cash payments to participating landowners for purchase of conservation easements on qualifying land. NRCS will also provide 100 percent cost-share payments for wetlands restoration practices on land placed under permanent conservation easements (50 percent for restoration practices required under 30-year easements).

The NRCS is also responsible for technical assistance. They will determine eligibility of land and owners, and in consultation with the U. S. Fish and Wildlife Service (FWS) will specify or approve all restoration practices. The NRCS will consider input from state forestry and wildlife agencies where needed. They will develop a Wetlands Reserve Plan of Operations (WRPO), or similar plan, summarizing technical considerations and requirements.

Who and What Qualifies?

To be eligible for the WRP a landowner must have owned qualifying property for at least 12 months preceding the date an application to participate is submitted. Exceptions may apply if the land was acquired more recently by will or succession; or, as determined by NRCS, the land was not acquired specifically for the purpose of placing it in WRP.

Lands eligible for the WRP include farmed wetlands that can be successfully and economically restored, wetlands farmed under natural conditions, and "prior-converted" croplands which were converted on or before December 23, 1985. Also eligible are lands that are former or degraded wetlands that have had a history of agricultural use. This includes crop and/or forage production. Some lands currently enrolled in the Conservation Reserve Program (CRP), which were farmed wetlands or prior-converted wetlands, may also qualify. WRP areas can include some adjacent lands, buffer strips and riparian stream corridors on which the wetland is dependent, though restrictions apply to widths and acreages.

How to Enroll

To enroll land in the WRP, an eligible landowner must file Form NRCS-LTP-1 "Application for Long-Term Contracted Assistance through the (Wetlands Reserve) Program" with the local county NRCS office during an announced sign-up period (May 30-June 30, 1995). Following submission of an application by an eligible landowner, NRCS and FWS will determine eligibility and desirability of the tracts offered. Tracts will be ranked by the NRCS through use of criteria including 1) duration of the easement offer, 2) hydrology restoration potential, 3) habitat value for migratory birds and other wildlife, 4) presence of threatened or endangered species, 5) wetland functions and values, 6) location significance, 7) wetland management requirements, 8) physical site condition, and 9) overall cost.

While the law allows for either permanent or 30-year easements, priority will be given to permanent easements. Following prioritization, NRCS will extend offers on high-priority tracts. A Wetlands Reserve Plan of Operations (WRPO), or similar plan developed by the NRCS, will include detailed information on what restoration practices must be applied, who must implement and maintain them, and how much cost-shared funding would be made available.

It is important that the plan of operations spell out all necessary restoration practices as well as any potential income-producing activities anticipated by the landowners (such as hunting leases). This plan of operations subsequently serves as the base document for a restrictive Wetlands Reserve Program conservation easement. The recording of the Warranty Easement Deed in the local land records office, obligates the landowner to restore and protect wetlands functions and values on the specified tract in accordance with the plan of operations for the duration of the easement.

Determining Easement Value

The value which may be offered to a qualifying landowner for a permanent conservation easement under the Wetlands Reserve Program will be the least of three values considered by the NRCS. The first of these three values is a statewide "cap" or maximum value which has been set at $900 per acre. The second value is an appraised tract value as determined by a professional real-estate appraiser under contract to the NRCS. The third value may be volunteered by a landowner who wishes to establish a fixed (but lower) reimbursement value on a conservation easement, perhaps in order to raise its priority for inclusion in the program.

If accepted into the program, thirty-year easements will be purchased at 50 percent of the value paid for permanent easements. Payment for thirty-year easements will be in not fewer than five, and not more than 20 equal annual payments which cannot exceed $50,000 per year; as opposed to lump sum payment made for permanent easements at the time the deed is filed.

In deciding whether to accept an offer for a conservation easement, a landowner should keep in mind several points. The duration and finality of a conservation easement and the constraints it places on management will cause it to affect the property's future market value as well as its income production potential. No provisions are available for future buy-outs or hardship releases. One recourse available to a dissatisfied landowner would be to give the property away or sell it for its residual market value. However, the easement would continue to apply to any future owners.

Once a landowner can estimate all the costs and income constraints imposed through compliance with, and maintenance of, all provisions of the plan of operations and conservation easement, economic consideration can be given to any offer for such an easement. An offer would appear to be reasonable if it exceeded the total of the present value of all out-of-pocket costs added to any reduction in income (or land value) occurring because of restrictions placed on present and future income production or other land use opportunities. It should be possible to estimate the costs, if any, associated with restoration practices from information contained in the plan of operations. However, the actual difference between the land's fair market value prior to the easement and after the easement is recorded could be difficult to estimate.

Tax implications of a conservation easement could be significant. Tax considerations should include the continuing obligation to pay property taxes, and consideration of how the land might be appraised and taxed by the county following such an easement. Income and estate taxes could also be affected by sale of an easement, and by the existence of such an easement. Treatment of any payments for the easement, as well as cost-sharing reimbursement, could also affect income taxes.

These points are brought up simply to help landowners evaluate the acceptability of an offer for a conservation easement under the Wetlands Reserve Program. They are not meant to imply that income production is paramount in making a decision to participate. This is, after all, a wetland restoration program, rather than a commercial land management program. In many, if not all situations where income production is a high priority, other programs are quite likely to be more suitable.

After developing an acceptable plan of operations, and after learning what the government will pay for an easement, the landowner must make a final decision whether to enter the Wetlands Reserve Program or end further consideration.

Just What is a Conservation Easement?

After a landowner's application is accepted into the Wetlands Reserve Program by the NRCS, in order to participate in the program a Warranty Easement Deed must be granted to the NRCS. The easement requires restoration and protection of the wetland and associated habitat as spelled out in the plan of operations. The easement must be recorded in the local county courthouse; and will run with the land, either permanently, or for thirty years (if accepted). The land's owners and any future owners will be obligated to comply with all terms and conditions of the easement and the plan of operations. Operation and maintenance of installed practices may be the responsibility of the government (permanent easements only) or the landowner (thirty-year easements, fence maintenance, control of noxious weeds and pests). Landowners will also be responsible for maintenance of an access to the easement area; payment of taxes on easement lands; securing any necessary local, state and federal permits prior to commencing restoration; and permitting NRCS and its representatives to inspect each easement area at any time to ensure that required restoration and maintenance procedures are installed and maintained.

The WRP easement does not open these areas to public hunting, fishing, or other forms of recreation. Landowners continue to maintain their private ownership, and control access to, and use of, any Wetlands Reserve Program tracts as specified in the plan of operations.

Who Pays?

Cost-sharing will be approved through NRCS for establishment of specified wetland restoration practices. "Average rates" for the various acceptable practices have been established, and 100 percent cost-share will be available for permanent (50 percent for thirty-year) easements. In addition, other agencies and private conservation organizations can provide material or financial assistance as long as the total cost-sharing payment and other compensation does not exceed out-of-pocket costs. Also NRCS will reimburse the landowner fair and reasonable costs associated with boundary marking, title and lien searches, and legal fees necessary in the process of filing the easement documents.

Both the landowners involved and the agencies providing technical and financial support are likely to favor the quickest, easiest, and least-cost acceptable restoration practices. This will allow the program to most cost-effectively restore the largest possible number of wetland acres. It also recognizes the limitations on future income production possibilities, which are subject to the discretion of the government agencies granted the conservation easement.

Wetlands Restoration

The purpose of the Wetlands Reserve Program is to restore the hydrology and vegetation close to conditions prior to alteration, and to protect all functions and values of the restored wetlands. Hydrology (or water table) is generally considered to be the driving force in a wetland ecosystem. Therefore, a primary goal of any restoration plan is to restore hydrology to a level that existed "prior to alteration" (farming). This might be accomplished as simply as blocking an existing ditch or removing part of a tile drain system. The degree to which the "original" hydrology is restored on a given area is a primary factor in the bid ranking process.

The hydrology in turn dictates appropriate plant species for a given site. Water table management also influences the potential to control or manage fire. Fire is an especially common and significant disturbance in wetlands characterized by organic soils. These two factors (water and fire) independently and jointly affect the development of understory as well as canopy (dominant) plant species. Landowners should consider both in development of an appropriate plan of operation.

Following disturbance such as fire or farming, ecological succession eventually results in trees and woody shrubs becoming established and developing into the dominant vegetation on nearly all potential WRP sites in North Carolina. The emphasis in vegetation restoration is on low maintenance, naturally functioning (generally forested) wetland ecosystems. Natural regeneration may be considered adequate for some situations. However, many native tree species can be artificially established by direct seeding or planting seedlings, greatly accelerating the restoration of a given site. Certain of those species also have particular (economic) value either for wildlife habitat or for timber. Some recommendable species such as baldcypress, tupelo or Atlantic white-cedar generally grow in dense, pure stands; while many others commonly occur in extremely diverse mixtures.

Potential wetland reserve sites in North Carolina may be separated into five broad soil categories: deep organic, shallow organic, clay/loamy textured mineral, sandy textured mineral and stream floodplain. Some examples of naturally occurring tree species are listed for each broad site category for consideration in planning suitable restoration. Of course, many additional species, from common trees (such as red maple) to woody shrubs (such as various bays) to the uncommon (such as insectivorous herbs) might also figure into any specific plan, depending upon site and landowner considerations. Specifics on site preparation, planting methods, spacing, species mixtures and weed control must be developed on an individual case and site basis.

Deep organic soils are comprised of peat/muck greater than about 18 inches deep, typically called pocosins or bays. These sites naturally support dominant tree species such as Atlantic white-cedar, pond pine, red maple or occasionally loblolly pine, depending upon water table and history of timber harvest, land use or fire occurrence. Shrub species such as bays, titi and gallberry frequently occupy many of these sites.

Shallow organic soils are comprised of peat/muck that is less than 18 inches deep, grading into thin (less than 2 inches) layers of peat over "organic sand"--often called salt and pepper soil because of the appearance of the sandy organic mixture. Such sites naturally support dominant tree species including Atlantic white-cedar, baldcypress, hardwoods (such as red maple, yellow-poplar, gums and wet-tolerant oaks) and pines (pond, loblolly, longleaf) depending primarily upon the frequency and intensity of fire.

Clay/loamy textured mineral soils include some of the most productive eligible for the WRP. Many tree species grow on these soils including baldcypress, hardwoods (for example tupelo, green ash, some oaks on the wetter areas; sweetgum, yellow-poplar, and more oaks on the moist areas), and pines (primarily loblolly or longleaf).

Sandy textured mineral soils predominate on areas called savannas and flatwoods. These are typically underlain by "hardpans" that prevent good percolation, so surface water is seasonally abundant. Pine species typically predominate (pond, loblolly or longleaf) with occasionally Atlantic white-cedar and mixtures including hardwoods in perennially wet areas.

Stream floodplain soils include first and second terraces along either black water (coastal plain origin) or red water (Piedmont or mountain origin) rivers. Growth rates and species composition are greatly influenced in these "bottomlands" by variable site-specific conditions relating mostly to floodplain position (for example elevation or soil particle size). Multiple species, including most of those found on other mineral soils, generally exist in complex mixed stands of oaks and gums, with occasional pine.

Many additional tree, shrub and other plant species grow on these soil categories frequently in combination with those mentioned above. Plant communities are not static, but continue to change over time. Many species become established without planting. Therefore, when wetlands reserves are initiated, maintenance designated by the plan should anticipate and incorporate some concept of plant community change.

Wildlife and Forestry Implications

The Wetlands Reserve Program provides an opportunity for the establishment of forested wildlife habitat on restored wetlands. The site being restored influences which wildlife species are likely to benefit. Some areas, such as healthy mixed bottomland hardwoods found on stream floodplain soils, are particularly valuable for waterfowl and migratory birds, as well as resident populations of deer, small mammals, reptiles and amphibians. Other areas, such as deep organic "pocosins" may have more limited potential, or may benefit fewer or different species. Through appropriate restoration, conditions can be enhanced for a variety of favored plant and wildlife species.

The Wetlands Reserve Program specifically allows landowners to generate income from compatible recreational uses such as leasing hunting and fishing rights. Such economic opportunities depend upon location, site characteristics, acreage, access, restoration practices, and restrictions applied by the NRCS. Surrounding habitat and wildlife populations could also influence the maintenance and management of target species.

Compatible economic uses such as managed timber harvest, or periodic haying or grazing, may also be permitted by the NRCS under the Wetlands Reserve Program. Such authorizations must be requested in writing by the landowner at the time of consideration, and granted in writing by the NRCS. The agency retains sole discretion to grant or terminate such allowances, and to specify the terms and conditions of acceptability, which will require at a minimum that any such activity be consistent with the long-term protection and enhancement of the wetland resources for which the easement was established. It does not appear that the landowner can reserve any "right" to harvest timber (or hay) at such a time and in such a manner as to necessarily generate economic benefit. Under such uncertainty, it would seem prudent from an economic perspective to minimize investment in timber management.

The Wetlands Reserve Program is currently operating under interim rules as changes are being made to expedite the enrollment process for high priority tracts and situations. A number of forms and steps in the process are being deleted or revised. If you are interested in placing land in the Wetlands Reserve Program, please contact your local NRCS representative for the current and complete details. Assistance will also be available at any of the cooperating agencies.

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Published in June 1995

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